HEXO Corp: HEXO Stock Sees Huge Boost After Bank of America Endorses It
HEXO Stock Boost
This has been a year of firsts. The legal marijuana sector has seen more evolution in 2019 than in arguably any other year. The industry’s maturation has been kicked into overdrive, with politicians, analysts, and even major banks coming out in support of pot.
The latest news comes as Bank of America Corp (NYSE:BAC) (BoA) begins its coverage of marijuana with a note supporting HEXO Corp (NYSEAMERICAN:HEXO). As a result, HEXO stock shot up in trading on Wednesday.
BoA’s note named HEXO as among the top pot stocks for the analyst at BoA, largely in keeping with my own projections. (Source: “HEXO Is Top Pick as Bank of America Initiates Cannabis Coverage,” TheStreet, April 17, 2019.)
But, as you would imagine, the word of a BoA analyst carries slightly more weight than my own in the investment world, leading to a huge jump in value for HEXO.
HEXO stock gained nearly nine percent by noon on Wednesday, marking one of the stronger days for the company in some weeks now.
But this isn’t likely to be the end of gains for HEXO Corp. After all, there’s a reason that both myself and the Bank of America are strongly supportive of the marijuana penny stock.
Heck, maybe BoA got the idea to support HEXO by reading my columns. As anyone who follows Profit Confidential will know, I’ve been very bullish on HEXO for months now.
Top Pot Stock: HEXO
When it comes to marijuana penny stocks—or even marijuana stocks in general—few companies have as much going for them as HEXO does.
This year alone, the company has already scored several major victories, the most important being stellar numbers out of the company’s financial report.
Its gross revenue in the last quarter increased 1,269% versus the same prior-year period and 144% versus the previous quarter.
The company produced 4,938 kilograms (about 10,886 pounds) of dried cannabis in the quarter, an increase of 39% over the previous quarter. Of that, 2,689 kilograms (about 5,928 pounds) was sold in the quarter, an increase of 142% from the company’s last financial report.
“This is an exciting time for HEXO as we continue to achieve milestones on the way to becoming a top two cannabis company,” said CEO Sebastien St-Louis. (Source: “HEXO reports over $16.2 million in total gross revenue in the second quarter of fiscal 2019,” Globe Newswire, March 14, 2019.)
HEXO also acquired Newstrike Brands Ltd (OTCMKTS:NWKRF, CVE:HIP). The deal will see the company’s production capacity expand while putting the company firmly in eight Canadian provinces. (Source: “HEXO Corp to acquire Newstrike Brands Ltd.,” Globe Newswire, March 13, 2019.)
It also listed on the New York Stock Exchange, making it one of the few marijuana penny stocks with a major U.S. listing.
That’s all in 2019.
I didn’t even mention the company’s past successes, like its partnership with Molson Coors Brewing Co (NYSE:TAP) and its killer five-year supply agreement with Quebec, one of Canada’s largest provinces.
All this combines to make HEXO Corp one of the strongest performers in 2019.
Chart Courtesy of StockCharts.com
As seen in the chart above, HEXO stock has nearly doubled in 2019, with gains nearing 90%.
I have long been bullish on HEXO, so readers of mine who invested at nearly any point since 2019 began would have seen huge gains.
And I don’t think those gains will slow anytime soon.
HEXO Stock Prediction
Much like BoA, I believe that there’s plenty of room left for HEXO Corp to grow. In fact, I predicted earlier this year that I could see the stock hitting $20.00 sometime in 2020. I stand by that.
There’s still a better-than-zero chance that it doubles again in 2019, depending on how the industry continues to perform.
There are concerns of a marijuana stock downturn due to the rapid growth early in the year, but we haven’t seen anything close to resembling a correction yet. I’ve even jumped the gun myself a few times and claimed that one may be approaching, only to see pot stocks bounce back.
This year has demonstrated how, in their maturity, marijuana stocks have now also gained resiliency.
Investors are no longer as fickle as they once were, largely due to the sales numbers generated from the Canadian marijuana market and broad support from investment gatekeepers like banks and analysts. Even mainstream U.S. politicians are now coming out in support of marijuana reform on a national level, something we have never seen before in the marijuana industry.
Which is all to say that HEXO stock is one of the best stocks in one of the best industries, and as such I believe big gains are in store.
Analyst Take
While the Bank of America support for Hexo Corp is welcome, it is really only echoing something we’ve already known here for a long time: Hexo is a winner.
The stock has seen strong gains for months now and the company has a solid string of achievements under its belt. You really can’t ask for more from a pot stock.
